Overdraft charges seen as cash advances - need to keep making payments on this CC?

[JJCA]

One of my cards (Wells Fargo Visa card) was connected to my bank account. It had overdraft protection on it. So if my checking account was overdrawn the money/coverage 'charged' to my credit card. I never realized that it was seen as "cash advances" (not that it really even mattered at the time). BUT, now that were need to file BK (probably a 7 since we can't fund a 13) "cash advances" are an issue! I stopped paying my CC in February. The last "cash advance" (in the form of an overdraft) was mid March. (I have canceled overdraft protection, so that won't happen again) Recently it was mentioned to me that I should make at least 4 more payments after the last 'cash advance/overdraft'. Was wondering if anyone knew if this was good advice. What would be the reason for doing this? I would only be paying this card, can't afford to pay any others ($80,000 in CC debt). Wouldn't paying this CC only & no others become an issue?

Thanks...
JJ (in CA)

[Clabbergirl]

I filed 7 last month, but my attorney said credit cards purchases or cash advances had to have stopped 90 days prior to the filing date (this had stopped many months before for me so it didn't matter). If overdraft protection is considered cash advance, I'd imagine the same applies. If you're going to file 7 anyway, why don't you stop paying your credit cards? All of them. They will call and contact you with all seriousness, but it's pretty unlikely they'd file a lawsuit against you in only 3 months. Then file and all harassing calls stop. It is my understanding that it doesn't matter how many payments are between cash advances and BK filing. What matters is time, and that needs to be 90 days.

[frogger]

How much money are we talking about here?

[JJCA]

How much money are we talking about here?

March 2011 $450
Jan 2011 $680
Nov 2010 $90 & $100
Aug 2010 $470
June 2010 $550 & 40
May 2010 $70
Apr 2010 $1,200 & $95 & $200
Jan 2010 $650
Dec 2009 $1,000 & $580

How far back should I look?

In case it matters, I paid off this card in July or August of 2010 with a balance transfer from another CC. I also continued using this card after doing so, heavily in fact. Used it to pay bills with bill pay feature, including paying other CC minimums. (I have other posts about that..for THIS post I really am just wondering about the 'overdrafts' that are considered "cash Advance")

THANKS!!

[helpmeout]

What does your attorney say?

[JJCA]

What does your attorney say?

No attorney hired yet (well gave a deposit to one but no longer intend to use them - long story - expensive lesson learned!!). One other that I consulted seemed to say/imply (with limited info to them - was just a consult) that we should make at least 4 payments after last overdraft "cash advance." But it seems odd to keep paying ONLY one CC & not pay others. Seems that may be preferential? Or maybe that should not be my concern, maybe he was trying to protect 'us' from an AP or something??? That is why I am asking here, hoping to gather insight or opinions at least...no attorney to ask at this time.

It is doubtful even that we could pay this CC with our available funds..but if we really should then I would try to find a way even if it means letting other bills go.

[frogger]

March 2011 $450
Jan 2011 $680
Nov 2010 $90 & $100
Aug 2010 $470
June 2010 $550 & 40
May 2010 $70
Apr 2010 $1,200 & $95 & $200
Jan 2010 $650
Dec 2009 $1,000 & $580

So are these charges still on the card, or have they been paid?

[JJCA]

I made a large payment (balance transfer) to the card end of July 2010. I also charged again on it at the same time. So balance never really read "$0" as I charged again on it right away. Looking at it that way (had not considered it), then anything before August was paid off (via balance transfer).

That leaves charges from August to present as remaining. This card is maxed out at about $16,000. Most charges are these overdrafts/cash advances, money sent to a friend via bill pay, and bills in general (including payments to other credit cards). The overdrafts/cash advances are the apparent sticking point & why I am trying to see if we need to keep making payments on just this card. We can't afford to do so, have literally $0 income at the moment, but don't want an AP or fraud charge or anything like that. If we need to keep paying, will borrow to do so.

Thanks so MUCH for trying to help me figure this out!!

[SunshineGal]

I would think as long as you wait 3 months from the last balance transfer you'll be okay, but be sure to ask your attorney.

[frogger]

You're probably no more guilty than anyone else with a credit card. We've all been there, done that, robbed from one to pay another. Since you have a pattern/history on the card, it will most likely show a financial struggle, not an intent to defraud the creditor.

One thing that does concern me however is the paying of the friend...

[IamOld]

You're probably no more guilty than anyone else with a credit card. We've all been there, done that, robbed from one to pay another. Since you have a pattern/history on the card, it will most likely show a financial struggle, not an intent to defraud the creditor.

One thing that does concern me however is the paying of the friend...

FROGGER, this is a very very good question! May as your wisdom also (and forgive on intruding on the thread). Despite my best efforts, one thing that will be included in bankruptcy (looks like a 13...or even if a 7) is sadly a checking overdraft account for a bank I really like, but I cannot get the 400 together to just pay it off...at any rate, over the last couple of months, here and there, it advanced 20 or so, 10 or so...not any more because it's been maxed out for like two years...it pays itself when money is deposited...I am presuming that's ok??

ALSO - deep breath - and I know I know - and feel free to beat up on me because it is stupid - about a month ago I had to access a credit line for $800 (it's kind of like a payday loan, but not as bad) because I simply ran out of cash between paying the atty, and mort. They AUTOMATICALLY pay themselves back the next time I get paid, so the payback was about $562 twice for a total of $1100 or so. (I KNOW!! I know...) So I took the loan, BUT paid it back. If the Trustee decides this is preferential, at worst a) will they ask me for it (which is ok) or will they go after the lender (which is ok), or will this be just part of the course? PLEASE NOTE - I have NOT YET filed!!

[frogger]

If the Trustee decides this is preferential, at worst a) will they ask me for it (which is ok) or will they go after the lender (which is ok), or will this be just part of the course? PLEASE NOTE - I have NOT YET filed!!

The trustee should go after the lender for the payment if it is deemed to be preferential.

And on another note - why don't you stop using the account that you are overdrafted on and let it be. Get you another account that is not "feeing" you do death with overdrafts and charges.

Start fresh!

[IamOld]

The trustee should go after the lender for the payment if it is deemed to be preferential.

And on another note - why don't you stop using the account that you are overdrafted on and let it be. Get you another account that is not "feeing" you do death with overdrafts and charges.

Start fresh!

A trillion thanks frogger!!!!!

Re account - that bank actually has no fees :-( and i'm kind of sad to have to leave them, because I would have wanted to keep the account but I cannot get the 400 together to pay it off...oh well.

I actually opened an account a year ago in a small bank where I have NOTHING but checking, no credit line NOTHING!!! and that's what I'm using.

Speaking of overdrafted, I have a very old credit union account also, where I've just paid 280 for overdrafts because I don't want to be reported to Chex....of course there is a line of credit there too, but that'll have to be included in bankruptcy. This credit union does fee you to death!!!

Again, thank you thank you thank you.

[Clabbergirl]

I'm curious, IAmOld, why the worry about being reported to ChexSystems? I'm assuming you don't want to be reported there in case you want to open another account somewhere? If you've got a working bank account at a bank you have no included-in-BK loans with, does it matter?

[IamOld]

clabbergirl, you are 100% correct! I actually have TWO accounts at a bank and a CU where I have no loans nothing just a checking and savings acct (not much in it :-)

BUT you are exactly right - I don't want to be in Chex systems...if I even need to open any other account anywhere else I'm stuck...